The passage of the Clean Air Act in 1970 turned the tide of
environmental damage in America. It was the first of hundreds of
increasingly strict federal laws designed to restore the quality of
the country's air and water. The EPA throws its considerable
authority into enforcing those laws-at times with excessive zeal.
Two recent court decisions have defined the scope of that
authority.

Clearing the Air?

In 1997, the EPA released new standards for smog and soot, based
on updated research on their detriment to public health. A
coalition of truckers and other advocates of industry sued, arguing
that in passing the Clean Air Act, Congress had unconstitutionally
delegated too much of its authority to the EPA. They also contended
that the smog standards were invalid because the agency failed to
consider the costs of compliance.

In February 2001, the U.S. Supreme Court heard the case and
clearly affirmed the authority of the EPA to issue standards
without regard to the cost of implementation. The court found that
Congress intended for the EPA to consider only public health
concerns, not the cost to industry.

However, the court also ruled that the EPA violated the intent
of Congress when it called for immediate implementation of the smog
standards, rather than allowing regions reasonable time to comply.
Further, the court stated that states could take costs into account
when planning how to comply.

The decision didn't please the plaintiffs, but it's
generally a good one. Congress, not the courts, should determine
how to balance public interests with those of business. The EPA may
seem like a thorn in the paw of business, but we all benefit from
the clean air and water its vigilance has produced. Most of us
wouldn't want to sacrifice purity for profits.

Still, many business owners can testify that in its zeal to
protect the environment, the EPA has at times run roughshod over
individual companies. In fact, a U.S. District Court decision in
August 2000 rapped the agency on the knuckles for its tactics. The
case involved James Knott, owner of The Riverdale Mills of
Northbridge, Massachusetts, which produces wire mesh for lobster
traps. The court awarded Knott $68,000 in expenses and legal fees
when he sued the EPA under a rarely used provision of the Hyde
Amendment, passed in 1997, that allows a defendant who's been
exonerated of criminal action to seek legal fees from the
government if the prosecution was "frivolous, in bad faith or
vexatious."

The EPA had been tipped off by a former employee of the mill
that highly acidic waste water was being discharged illegally into
the town's sewage system. EPA inspectors tested the water in a
manhole outside the plant and confirmed its acidity. However, at
the urging of Knott, they also tested water in a second manhole
closer to where mill water entered the town system and found it
within legal limits. The EPA withheld the information from the
second test, however, when it requested a search warrant.

The events that followed were described in the judge's
opinion: "A virtual SWAT team consisting of 21 EPA law
enforcement officers and agents, many of whom were armed, stormed
the facility to conduct pH samplings. They vigorously interrogated
and videotaped employees, causing them great distress." The
business was then indicted on two counts of violating the Clean
Water Act of 1998, and the EPA issued a press release stating that
if convicted, Knott faced a jail term of six years and fines of up
to $1.5 million.

Later, when a federal prosecutor revealed that the exonerating
evidence of the test at the second manhole had been withheld, the
agency dropped its case. That's when Knott sued and won
compensation.

Our nation now enjoys the cleanest air and water since the
1970s, largely thanks to the vigilance of the EPA. But it's
reassuring for business owners to know that when the agency
oversteps its bounds, owners can fight back and win.

Steven C. Bahls, dean of Capitol University Law School in
Columbus, Ohio, teaches entrepreneurship law. Freelance writer Jane
Easter Bahls specializes in business and legal topics.